1. The two appellants seek to impugn the action of the Regional Transport Authority which by its decision dated 17-10-1966 rendered ineffective their stage carriage permits for plying buses on the route Vuyyuru to Thelaprolu, beyond December 31, 1966. They urge identical grounds in support of their plea and consequently the two Writ Petitions were heard together and were decided by a common judgment by Ekbote, J. These appeals call in question the dismissal of the Writ Petitions by our learned brother.
2. The facts that led to the impugned decision of the Regional Transport Authority (referred to herein as the transport authority) are as follows: The two appellants are transport operators each owning a bus; They held stage carriage permits relating to the route Vuyyur-Telaprolu which is a sector of the longer route Vijayawada to Vuyyur. The State Transport undertaking mooted a scheme of road transport service under Section 68-C of the Motor Vehicles Act (for brevity's sake called the Act). The scheme which included the route in question was not approved by the State Government. There was a fresh notification made by the Transport undertaking (i.e. the State Road Transport Corporation) under Section 68-C of the Act. The fresh notification purported to relate to a scheme involving four routes, three of which were of the Telangana area and the fourth one is the route concerning which these proceedings are initiated. It can by no means be said to be a coordinated transport system relating to the four routes. The scheme was nevertheless accorded approval by the State Government on 19-11-1959 under Section 68-D.
3. The transport undertaking implemented the approved scheme by obtaining the necessary permits under Section 68-F in respect of the three routes of the Telangana Area. As regards the route now in question, nothing was then done by the transport undertaking to give effect to the approved scheme. The two operators who held permits had them renewed for a period of three years from 10-12-1958 to 12-12-1961, and again for a further period of three years from December, 1961 and yet against till 18-12-1967 in one case and 31-3-1968 in the other case. The scheme which emerged as the approved scheme under Section 68-D by virtue of the Government's sanction was not implemented in its entirety. It was carried out only in so far as the three routes in the Telangana area were concerned.
4. There was thus a state of suspended animation in regard to the Vijayawada-Vuyyur route over a sector of which the appellants were allowed to operate as before. The Transport undertaking, which was alive to the omission as regards implementation of the approved scheme in respect of the present route started proceedings afresh by publishing a scheme under Section 68-C on 21st November, 1961. This was done because it was deemed doubtful whether the approved scheme still held the filed. It is to be noted that in addition to the route now in question, there was only another route in the scheme initiated by the later notification. While according approval under Section 68-D the State Government restricted it to the route Vijayawada to Mudunuru. This is clear from G. O. No. 1053 dated June 8, 1962. Although the route, here in question, was included in the newly adumbrated scheme under Section 68-C, there was no approval of that part of the scheme under clause D of the Section 68.
5. It was in that situation that action was taken by the Transport authority under Section 68-F (2) (c) (1) of the Act for the purpose of giving effect to the scheme dated 19th November, 1959. The proceedings dated 17-10-1966 evidence the decision of the transport authority that the permits of he vehicles of the appellants were to be ineffective beyond 31-12-1966. This decision was founded on and was designed to give effect to the scheme of November 19, 1959. The two appellants held permits which were valid in one case till 18th December, 1967, and till 31-3-1968, in the other one.
6. It is this decision of the transport authority that is sought to be quashed by the appellants who have advanced numerous contentions to sustain their attack.
7. The first submission made by Mr. Suryanarayana is that the approved scheme of November, 19, 1959 was modified or cancelled by reason of the conduct or action of the transport undertaking. When an attempt was made in 1961 to include the route in a fresh scheme inasmuch as the State Government did not accord their sanction in respect of the route now in question. Counsel urges that the old scheme of 1959 had lapsed and was given the go-by and that the transport undertaking manifested its intention to modify or cancel the scheme in regard to the disputed route. In fact it made an endeavour to include it in a fresh scheme and this attempt did not evoke the approval of Government. There is thus no foundation for the exercise of the power by the transport authority to render the permits of the appellants in-effective. The essential pre-requisite for the exercise of this power is the existence of a valid scheme and counsel submits that is lacking in the present case.
8. This argument is countered by the Government Pleader as also by the counsel for the Road Transport Corporation who urge that a scheme once approved under Section 68-D remains intact till it is modified or cancelled by another approved scheme. The mere formulation of a scheme by the transport undertaking and the notification of a modification under Section 68-C do not ipso facto abrogate or annul the prior approved scheme. It is only the finally evolved scheme sanctioned by the State Government under Section 68-D that displaces or effectively annuals a duly approved prior scheme.
9. Learned counsel for the appellants placed considerable reliance on certain dicta in the decision of the Supreme Court in Shrinivasa Reddy v. State of Mysore, : 2SCR130 . After examining the scheme of Section 68 Wanchoo, J., delivering the judgment of the majority of the Bench observed as follows:---
'Therefore, the scheme to be framed must be such as is capable of being carried out all at once and that is why the undertaking has been given the power to frame a scheme for an area or route or even a portion thereof. Further after the scheme is framed it is approved and published by the State Government. Thereafter it is the duty of the understating to carry out the scheme and in pursuance of that it applies for permits under Section 68-F (I). If the undertaking at that stage has the power to carry it out piecemeal it would be possible for it to abuse the power of implementation and to discriminate against some operators and in favour of others included in the scheme and also to break up the integrity of the scheme and in a sense modify it against the terms of Section 68-E. There is no difficulty for the Undertaking to apply for permits relating to the entire scheme at the same time, for the manner in which the scheme is prepared under Section 68-C takes into account all the difficulties which might arises in the implementation of the scheme and with that very object provides for taking over particular types of transport services in relation to areas or routes or even portions thereof. We need not, however, pursue the matter further on this occassion.'
10. Counsel submits that by reason of the omission of the transport undertaking to implement the scheme of 1959 in respect of route in question the integrity of the scheme has been impaired. He stresses the fact that not only the scheme is not implemented but the transport undertaking has made it plain that it considered that the scheme has lapsed and that it has become necessary to sponsor a fresh scheme so as to include therein the route in question. It is true that the scheme has not been enforced in regard to one of the routes. But can it be said that this omission coupled with the subsequent steps taken to include the route in a fresh scheme amounts to modification or cancellation of the scheme? The answer must be in the negative. It must be remembered that a scheme prepared under Section 68-C is only the first step in the integrated process that finally culminates in the approval of the Government under Section 68-D. The initiation of a scheme is no more than a proposal indicating the opinion of the Undertaking that for the purpose of providing a co-ordinated road transport service, it is necessary in the public interest that a scheme should be brought into existence concerning the route or routes in question. The scheme before it is finalised, is subject to public gaze and scrutiny and the validity and appropriateness of the scheme are tested by a quasi judicial process. Consequently, the mere formulation of a new scheme although it embodies a proposal concerning a route which was the subject-matter of an earlier approved scheme cannot be equated to a modification or cancellation of the earlier scheme.
11. It is not competent for the transport Undertaking to modify or cancel a scheme by its unilateral action or by the mere formulation of a fresh proposal. The provisions of Section 68-C advisedly used the phrase that the transport Undertaking 'may prepare' a scheme giving particulars of the nature of the services proposed to be rendered etc. There is an unambiguous phraseology employed to denote that the initiation of a scheme by the transport undertaking is just a proposal placed before the general public for inviting opinion so as to enable the Government to take a final decision in the matter. Under Section 68-D the State Government is bound to give opportunity to the objectors or representative of the objectors to be heard in the matter if they so desire. It is open to the State Government to modify the scheme formulated by the transport undertaking and to accord approval of the sponsored scheme subject only to modification. There is, therefore, no doubt, that the scheme of 1959 holds the filed notwithstanding the omission of the transport undertaking to carry out the scheme in its entirety.
12. The observations of Wanchoo, J., relied on by the learned counsel, are intended to stress that the scheme placed before the Government must be a properly co-ordinated scheme for transport services which is capable of being implemented all at once. The dicta point out the possibility of a discriminatory action involved in the deferments of the implementation or in piecemeal implementation. We are not persuaded that the observations of Wanchoo, J., have to be read as enunciating a proposition of law that the non-implementation of a part of a scheme ipso facto results in its modification. Nor are we persuaded that the action taken by the transport undertaking to include the route in a fresh scheme is tantamount to a modification. The argument of the learned counsel that the scheme of 1959 has ceased to be legally enforceable cannot be up held as sound.
13. The Government Pleader drew our attention to the terms of Section 68-E which make it abundantly clear that the modification or cancellation is achieved by following the procedure laid down in clauses C and D. In other words nothing short of the approval of the Government in the manner contemplated by clause D can be deemed sufficient to set at naught an earlier scheme which received the seal of approval. It may be that the transport undertaking was intent on effecting a modification and with that object it formulated a new scheme, in which the route now in question was also provided for. But its intention is ineffective to bring about a modification although the intention was manifested in a concrete form in its notification made under clause C. The contention that the newly formulated scheme effected a modification has to be repelled because the scheme of 1961 notified under clause C did not meet with the approval of the Government under clause (D) in so far as the present route is concerned. The me was evolved to which the approved scheme of 1959 yielded place in respect of Vijayawada-Vuyyur route.
14. Counsel drew our attention to the proceedings of the transport authority dated 3-2-1962 . The subject which was deliberated upon was the renewal of permit to one of the appellants. The resolution of the transport authority was to the effect that the permit was to be renewed for the years. The reason assigned was that the Government did not accord approval to the scheme formulated by the transport undertaking. The reference to the non-approval is obviously to the fresh scheme of 1961. This resolution proceeded on the premise that there was no approved scheme because the proposed scheme did not secure the approval of the State Government. The fact that the transport authority understood the position in that sense does not affect the true legal position which in our view is that, the approved scheme of 1959 stood unaffected by the later proposal or notification under Section 68-C. It was pointed out by Subbarao, J. (as he then was) in Dosa Satyanarayana Murthy v. The Andhra Pradesh State Road Transport Corporation, : 1SCR642 .
'If the State Transport Undertaking seeks to modify a scheme, it will have to follow the same procedure before doing so: see Ss. 68-C, 68-D and 68-E of the Act.'
15. The next contention of counsel is that even in the 1959 scheme is intact, it is not open to the transport authority to implement it by asking in a belated manner, for a permit under Section 68-F, after the lapse of several years when the appellants were induced to act all along on the footing that the scheme of 1959 was not capable of enforcement so far as the present route is concerned. This contention is without any merit. No circumstances justifying the application of the equitable rule of estoppel are mad out. The plea was not in fact urged in that form in the writ petitions. The ground of attach is that inasmuch as the scheme was not carried out in its entirety at one and the same time. what was left out at the first stage cannot be enforced at a later point of time. There is no provision of law cited which lends supports to the contention. Counsel resorts to the dicta of the Supreme Court already extracted by us to maintain that a piecemeal implementation is not permissible. It is pertinent to recall how their Lordships of Supreme Court explained in : 1SCR642 the import of the dicta of Wanchoo J., at p. 658 it was said:
'The observations of this Court in regard to the implementation of a scheme piecemeal to the implementation of a scheme piecemeal were aimed at to prevent in abuse of power by discrimination against some operators and in favour of others in respect of a single scheme.'
16. We are of opinion that what the majority judgment in : 2SCR130 cautioned against is the break-up of the integrity of a co-ordinated system of transport service. In the present case the scheme approved by the Government in 1959 did not constitute a co-ordinated system, the route in question in Krishna District having nothing in common with the other routes in the Telengana Area.
17. The Supreme Court emphasized on the need to preserve the integrity of a co-ordinated system. Where, however, as in the present case, many routes, which by no means satisfy the test of co-ordinated transport system, were dealt with under a single scheme, there is nothing inherently wrong in adopting different dates for implementation in respect of the several routes. The vice lies in combining in a single schemes such totally unrelated routes as three in the Telangana Area and one in the Krishna District. The routes in Telengana did not dovetail into the other in Krishna. They were altogether disjoined and unconnected transport systems but they were nevertheless grouped in a single scheme in a manner entirely foreign to the intendment of co-ordination. We must register our surprise that notwithstanding the canons furnished by Chapter IV of the Act., routes which can be no stretch of imagination be deemed to be parts of a co-ordinated transport service were comprehended in a single scheme. It is impossible to discern any justification for taking a route of very minor importance in the Krishna district, isolate it from other routes in the contiguous areas, and to mention it as part and parcel of a scheme formulated in regard to three other routes in Telangana region. which also seem to be lumped together without any regard for the principle of co-ordination. The scheme of 1959 it is strange to say, commended itself to the State Government though it presents every feature which makes it incapable of being carried all at once. The routes that were thought of for inclusion in a single scheme could not have been picked out for inclusion in a scheme on the footing that it provides an efficient, adequate, economical or properly co-ordinated road transport service. We are not called upon here to quash the scheme of 1959 on the ground that I was vitiated by an arbitrary or unwarranted exercise of power. We desire to point out that in the case of widely divergent routes included in a single scheme the non-implementation within a reasonably short period of time in respect of some of the routes, does not offend the principle which the Supreme Court had in mind in making the observations strongly relied on by counsel. The test is this: Has the delay impaired or shattered the integrity of the scheme conceived of as a single-co-ordinated unit? Our answer is that the question of integrity of the scheme does not arise on the facts of the present case because the several routes specified in the scheme are not closely knit, nor form a co-ordinated system of transport. Each route is hence to be treated as a separate or independent unit.
18. We have now to turn to the question whether the order limiting the duration of the permit is void for the reason that the appellants were not given any notice of the proceedings and were denied the opportunity of making their representations to the transport authority. The Government Pleader submits that there is no requirements as to the issue of notice when the authority is called upon to act under Section 68-F (2) (b) or (c). He calls in aid the provisions of sub-section (1) of Section 68-F which leave no option to the transport authority but tot grant a permit to the State Transport undertaking when it asks for it conformably to an approved scheme. He poses the question whether any purpose is served in issuing notice to the holder of a permit when he has necessarily and by the compulsion of law to yield his place to the State undertaking.
19. It might at first blush seem to be an idle formality to given notice to a party who is under law disabled from resisting the State Undertaking's application for a permit.
The inevitable result of an approved scheme is that the State undertaking has the irresistible claim to the grant of a permit. When the scheme provides for the exclusion of other operators, the latter cannot obviously have any further claims to urge. What then is the basis for urging that even so, the private operator must be allowed to have his say before the duration of his permit is curtailed to his detriment? It must also be remembered that Rule 11 which was previously in force has been deleted. That rule made the issue of a notice obligatory but it ceased to have force when the conditions of the permit were varied by the impugned resolution of the transport authority.
20. There can be no doubt that the issue of a permit to the State undertaking is a necessary consequence of an approved scheme. In Kalyan Singh v. State of Uttar Pradesh. ( ( 1963) 1 SCJ 50) = (AIR 1962 SC 1183) it was held that the Regional Transport authority is by the terms of the scheme left with no discretion after the scheme had become final. The orders passed by that body are purely consequential and flow from the publication of the approved scheme. The issue of an order was said to be not quasi-judicial but administrative.
21. A later decision in Sobhraj Odharmal v. State of Rajasthan, : AIR1963SC640 affirms the view that the issue of permit to the State Transport undertaking and the cancellation of the permits of private operators are the inevitable result of an approved scheme.
22. It is true that there is no option vested in the transport authority in regard to the grant of permit to the State undertaking. But a question of some consequence arises from what date is the permit of a private operator to become ineffective. Now the statute has made no specific provision that on the State undertaking applying for a permit, the private operator's permit automatically becomes ineffectual. On the contrary, the transport authority is vested, with the function of specifying a date from which the permit is to become in-effective. This function, can, by no means be described as a mechanical act not calling for the exercise of discretion by the transport authority.
23. We can easily visualize circumstances in which the manner of exercise of discretion in fixing the date, may be productive of grave consequences. There may be operators in some routes, with fleets of buses. with large establishments, with considerable stocks of material and spare parts and with premises tenanted in the expectation of a continuity of the business. There may be on the other hand, in some routes operators with a single bus to whom the termination of the business may not give rise to the seam type or degree of problems. To fix the same date in regard to both cases is tantamount to the non-exercise of discretion. It appears to us that in fixing the date beyond which the permits are to become inoperative, the transport authority is not performing a mere mechanical act in which discretion plays no part. It has to exercise it in a reasonable manner; and it admits of no doubt that in making the order. it has to take into account several circumstances affecting the operators. weigh them and come to a reasonable conclusion.
24. It must also be borne in mind that the approved scheme itself does not fix that date or dates for its implementation and that the Regional Transport Authority has to perform that function. Reference may be made in this context to the decision of Seshachelapathi, J., in D. Sangayya v. State of Andhra Pradesh, AIR 1962 Andh Pra 462 at p. 466 the learned Judge said:
'................... the date is not an integral part of the scheme, and need out, therefore, be mentioned in the scheme at the stage of being approved under S. 68-D.'
25. Adverting to an unreported earlier decision he summed up by effect thereof thus:
'it was further held that the question of fixing of the date can arise only at the implementation of the scheme.'
26. The learned Judge continued to set out the effect of the earlier decision (affirmed by the Supreme Court in Civil Appeal No. 347 of 1961)
'Their Lordships of the Supreme Court have approved of the view taken by the High Court and observed that the fixing of the date is a matter of detail and that it is for the Regional Transport Authority to fix the date ........... as it is for the Authority that has, under S. 68-F, the duty to issue a permit or cancel an existing permit.'
27. The learned Judge also observed that the fixing of the date with effect from which the permit ceases to be valid amounts to fixing the date of implementation or the date from which the scheme takes effect.
28. In view of this legal position which was accepted to be correct by the Supreme Court. we are of opinion that the statutory function under S. 68-F (2) cannot validity be performed without giving notice to the private operators whose permits are sought to be modified or cancelled. The absence of notice is undoubtedly an irregularity in the impugned proceedings.
29. The question, nevertheless, remains whether, the irregularity has prejudicially affected the appellants in any substantial manner. They are small scale operators with one bus each and the time fixed by the Authority cannot be said to be incommensurate with the requirements of the case. Further the State undertaking has been plying its buses for a considerable time now. We have come to the conclusion on the main question that the esteem of 1959 was not denuded of its validity and was not modified or displaced. That being the situation, it is not in the interests of justice to restore the status quanta and to revive the application of the State undertaking under Section 68-F. Having regard to all the circumstances of the case we hold that no case has been made out for quashing the proceedings solely for want of notice.
30. It was finally argued that the resolution of the Authority was passed in circulation and therefore it is of no legal effect. We are not able to accede to this contention. There are certain matters in respect of which a decision can be taken by adopting the procedure of circulation. As n notice was given to the operators, the procedure of circulation was not inappropriate.
31. The result is the appeals fail but we direct parties to bear their costs here and before Ekbote. J. Advocate's fee Rs. 100/-.
32. Appeal dismissed.